Bitcoin miners face bankruptcy as debt collectors come knocking
Core Scientific (NASDAQ:CORZ) is one of the world’s largest crypto miners. They may soon also become the world’s largest Bitcoin miner to file for bankruptcy.
- Core Scientific went public last year at a $4.3B valuation — trading as high as $15.
- Yesterday’s closing price: $0.20 (down 98%).
They’ve got 24 Bitcoins (~$500K) and $26M left in the bank. Not much, considering they had a $240M operating loss last quarter.
Yesterday, they told investors that they won’t make payments on upcoming loans — which means bankruptcy is on the table.
Bitcoin mining just isn’t as profitable as it used to be. Their entire business is literally using electricity-consuming equipment to mine Bitcoin — then selling that Bitcoin for profit.
It hurts when the main drivers in their business aren’t going in the right direction:
- Rising electricity prices: At current electricity prices, Bitcoin miners spend ~50% of their income on energy.
- Falling Bitcoin ($BTC) price: $BTC has lost over half its value this year.
This sends a warning to other Bitcoin miners. The longer the crypto winter lasts, the worse it’ll get.